Reply to WTF? Govt rewarding bad behavior Part II

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[quote=Anonymous][quote]Under the new version of Pay As You Earn, borrowers would pay 10 percent of “discretionary income,” defined as total income above 150% of the federal 
poverty level (about $16,000 for an individual). After 20 years, the loan is forgiven.

Assuming that a successful college graduate would earn, on average, $80,000 per year over the course of the 20-year obligation period, the repayment burden under the new plan will total somewhere around $4,500 per year, or $90,000 for the life of the loan. A less successful graduate who earns say $50,000 per year, on average over the 20-year obligation period, would have a repayment burden of just $1,500 per year, or just $30,000 over the life of the loan.

For students anticipating an average income, Pay As You Earn provides an incentive to borrow heavily: If you’re only going to repay $30,000 to $90,000, why not borrow $200,000? Frugality will be for suckers. [/quote]

Hello folks.  It is bad policy done purely for political reasons.
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